Economics Tele-Communications Essay

Economics Tele-Communications Essay

Length: 1466 words (4.2 double-spaced pages)

Rating: Term Papers

Open Document

Essay Preview

Telecommunications is one of South Africa’s fastest growing sectors and is one of the most advanced networks in Africa. The market is divided into three primary sectors; fixed lines, mobile networks and broadband. The structure of the industry will be described in an attempt to illustrate core economic principles, primarily related to market structures.
Some people may argue that the fixed line market is an oligopoly, since the entrance of Neotel in 2006. However, in 2012, Neotel only held 6% of the market while the other 94% held by Telkom (Mawson 2012). Telkom’s dominant market share indicates that the market is still operating as a near monopoly; it cannot be a pure monopoly due to the fact that there is another competitor that is a close substitute and it does not function effectively as a duopoly due to Telkom’s dominance. Furthermore, one may consider it a regulated monopoly due the role ICASA plays as the regulator.
Despite the new competitor and the fact that Telkom was losing customers due to mobile industry growth, Telkom used its monopoly to the best of its advantage: since 2000, its operating profit margin increased from R1.54 billion to just over R9 billion in 2007. In order to achieve such profit margins, the costs clearly must be high which was the case as South Africa is currently one of the highest in the world and studies have indicated Telkom's pricing as disproportionate (Ponelis & Britz 2008). Telkom had 4.8-million fixed-line subscribers in 2003 and only 3.9-million by 2012. In 2003, its network carried nearly 33-million minutes of telephone calls. By 2012, it struggled to carry 19-million minutes. Furthermore, fixed lines only accounted for 40% of their market share. Despite this, the declining market did n...


... middle of paper ...


.... Retrieved 26 February, 2014, from http://www.mediaupdate.co.za/?IDStory=38181
Theron, N. (2006). The Competitiveness of the SA Mobile Market- Will the entry of Virgin Mobile increase competition? Research Report, ECONEX, South Africa.
Theron, N. & Boshoff, W. (2006). Vertical Integration in South African Telecommunications: A Competitive Analysis. Research Report, ECONEX.
Van Rensberg, J. McConnell, C. & Brue, S. (2011). Economics: Southern African Ediiton, McGraw Hill.
Vermeulen, J. (2012, 3 July). Telkom vs Neotel: 2012 Price Comparison Retrieved 26th February, 2014, from http://mybroadband.co.za/news/telecoms/53805-telkom-vs-neotel-2012-call-costs-comparison.html
‘Vodacom, MTN feel Cell C’s punches: investor’ (2013, March 7). BusinessTech Retrieved 26th February, 2014, from http://businesstech.co.za/news/mobile/33155/vodacom-mtn-feel-cell-cs-punches-investor/

Need Writing Help?

Get feedback on grammar, clarity, concision and logic instantly.

Check your paper »

Essay on Effectiveness Of Remote Tele Monitoring

- monitoring. Seven out of eight studies showed statistically significant improvement in quality of life as well as reduced hospitalizations (Eysenbach, 2015). The Significance of Daily Weight Monitoring Patients diagnosed with CHF are instructed by their physician to perform daily weight monitoring. Increases in weight by five to six pounds in a week are an indication that the patient’s heart failure is not well controlled and an increase in diuretic medications may be indicated. When patients identify a significant weight gain associated with a heart failure exacerbation, they often experience a delay reporting the findings to their physician....   [tags: Health care, Hospital, Managed care]

Term Papers
1100 words (3.1 pages)

Essay about Objectives o Financial Communications

- The primary objective of financial communications of any individual firm is to survive. Financial communications would not be viable unless there remains a company to begin with; in order to do this a firm must create profit. Aside from profit, there are many other objectives of financial communications; the long term objective of securing wealth is coupled with satisfaction of financial requirements, such as the paying suppliers, clearing debts and paying appropriate dividends to shareholders. As well as managing and maintaining good finance managements in order to generate confidence within the business....   [tags: eporting, financial communications and methods ]

Term Papers
3240 words (9.3 pages)

Economics and Growth Essay

- The demand curve is likely to change upwards or rise as a result of changes in a number of factors. One, if there is a move up in the price of an alternative commodity, or decrease in price of the given commodity’s accompaniment. Two, if there is a rise in buyers’ income. Three, if the taste as well as preferencs of the consumers shifts in regard to the particular product or service under consideration. Four, when there is a decrease in the cost of borrowing. And finally, if there is an overall increase in the buyers’ trust accompanied with optimism for the particular product or service....   [tags: Economics]

Term Papers
931 words (2.7 pages)

Effectiveness Of Tele Monitoring Systems For Chf Patients Essay

- Purpose of the Study The aim of the study is to collect, evaluate and synthesize existing data on the use and effectiveness of tele monitoring systems for CHF patients due to the overwhelming cost and burden that heart failure patients pose on the healthcare system. A comprehensive study of health plan enrollees with CHF that accept tele monitoring versus a cohort of similar enrollees that decline tele monitoring will inform the researcher on the benefits and advantages or disadvantages from a cost perspective....   [tags: Health care, Health insurance, Health economics]

Term Papers
1221 words (3.5 pages)

Essay on Economics for Tertiary Sector

- The tertiary sector gives an incentive of a higher profit margin as compared to the rest of the two sectors. A firm needs to achieve productive and allocative efficiency in the case of primary sector; as profit margins are slightly low in this area. In the same way, transformation of raw materials into goods has been the task for the secondary sectors. E.g. manufacturing and assembling steel into car. ‘Slower labor productivity growth in Europe than in the United States since 1995 reverses a long-term pattern of convergence....   [tags: Economics]

Term Papers
892 words (2.5 pages)

Gap Analysis: Global Communications Essay examples

- Global Communications needs to address the current state of the company’s financial position in the telecommunications industry by coming up with a plan that will reduce operations expenditures and expand the company’s consumer base and market share internationally, all without negatively impacting the company’s long-term relationships with key stakeholders, and while continuing to strive to deliver an ever increasing array of high-quality services and products to the company’s end users. Situation Analysis Issue and Opportunity Identification As of late, interests in the telecommunications industry have been struggling in the stock market....   [tags: Global Communications Strategy Case Study]

Free Essays
1836 words (5.2 pages)

Essay on Team Communications: Workplace Meetings

- Team Communication: Workplace Meetings and Interactions Workplace meetings have become as common an occurrence in daily business activity as punching in on a time clock. "Done right, meetings are one of the most powerful communication tools." (Thibodeau, 2005, para. 1). As beneficial as productive meetings can be to business organizations, ineffective meetings can have an equally detrimental effect. Regardless of how boring or pointless they may seem, not even modern technology is a substitute for personal interfacing....   [tags: Business Communications]

Free Essays
1469 words (4.2 pages)

Essay about Global Communications

- Gap Analysis: Global Communications In today's telecommunication business, companies are increasingly outsourcing to improve profitability and productivity. From reading this scenario about Global Communication, several points of interest will be presented in this paper. The scenario involves a company called Global Communication and presents various business and ethical dilemmas that this company must face to continue being a competitive force in this field. This paper will discuss the initial problem that explains issues and opportunities....   [tags: Global Communications Gap Analysis Case Study]

Free Essays
866 words (2.5 pages)

Communications Essay

- What is communication. According to Hybel & Weaver (2004, p7) the terms ‘Communication’ which is interact with others to share information and beliefs, exchange ideas and feelings, make plans and solve problems. Sometimes this interaction is done interpersonally, in a team or small group, in a conference and sometimes through the media or via computer. We may say that communication consists of transmitting information from one people to another. Communication theory is explains the process of transmitting information, the form and structure of the information, the function and effects of the information....   [tags: Communication Definition Analysis Research paper]

Free Essays
1208 words (3.5 pages)

Economics Essay

-      Definition of Topic: Economics is the study of supply and demand. It defines the ways that human beings allocate resources and how resources are distributed amongst a market. It allows you to see trends in current market places and predict what may happen in the future. Many different subjects were once regarded as a part of economics. Political science and even sociology were once considered part of the field. These subjects still play a major role in understanding economics but are also completely separate disciplines today....   [tags: Understanding Economics Essays]

Term Papers
1694 words (4.8 pages)